Segment, Geographic and Other Revenue Information

9 Months Ended

Sep. 27, 2020

Segment Reporting [Abstract]

Segment, Geographic and Other Revenue Information

Segment, Geographic and Other Revenue Information

A. Segment Information

At the beginning of our fiscal year 2019, we reorganized our commercial operations and began to manage our commercial operations through a new global structure consisting of three distinct business segments: Biopharma, Upjohn and through July 31, 2019, Pfizer’s Consumer Healthcare business (Consumer Healthcare), each led by a single manager. Each operating segment has responsibility for its commercial activities. Upjohn is, and through July 31, 2019 Consumer Healthcare was, responsible for its own R&D activities while Biopharma receives its R&D services from GPD and WRDM. These services include IPR&D projects for new investigational products and additional indications for in-line products. Each business has a geographic footprint across developed and emerging markets. Our chief operating decision maker uses the revenues and earnings of the operating segments, among other factors, for performance evaluation and resource allocation. Biopharma and Upjohn are the only reportable segments.

Beginning in 2020, Upjohn began managing our Meridian subsidiary, the manufacturer of EpiPen and other auto-injector products, and a pre-existing strategic collaboration between Pfizer and Mylan for generic drugs in Japan (Mylan-Japan). As a result, revenues and expenses associated with Meridian and Mylan-Japan are reported in our Upjohn business beginning in the first quarter of 2020. In 2019, revenues and expenses from Meridian and Mylan-Japan were recorded in our Biopharma business. We have revised prior-period information (Revenues and Earnings, as defined by management) to conform to the current management structure.

Acquisitions and other business development activities completed in 2019 and in the first nine months of 2020, including the contribution of our Consumer Healthcare business to the GSK Consumer Healthcare joint venture, impacted financial results in the periods presented. See Notes to Consolidated Financial Statements—Note 1A. Basis of Presentation and Significant Accounting Policies: Basis of Presentation in our 2019 Financial Report, and Note 2.

Operating Segments

Some additional information about our Biopharma and Upjohn business segments follows:
	Pfizer Biopharmaceuticals Group
Biopharma is a science-based innovative medicines business that includes six business units – Oncology, Inflammation & Immunology, Rare Disease, Hospital, Vaccines and Internal Medicine. The Hospital unit commercializes our global portfolio of sterile injectable and anti-infective medicines and includes Pfizer’s contract manufacturing operation, Pfizer CentreOne. Each business unit is committed to delivering breakthroughs that change patients’ lives.		Upjohn is a global, primarily off-patent branded and generic medicines business, which includes a portfolio of 20 globally recognized solid oral dose brands, as well as a U.S.-based generics platform, Greenstone.
Select products include: - Prevnar 13/Prevenar 13 - Ibrance - Eliquis - Xeljanz - Enbrel (outside the U.S. and Canada) - Vyndaqel/Vyndamax - Xtandi - Chantix/Champix - Sutent		Select products include: - Lipitor - Lyrica - Norvasc - Celebrex - Viagra - Certain generic medicines

Other Costs and Business Activities

Certain pre-tax costs are not allocated to our operating segment results, such as costs associated with the following:

•WRDM––the R&D and Medical expenses managed by our WRDM organization, which is generally responsible for research projects for our Biopharma portfolio until proof-of-concept is achieved and then for transitioning those projects to the GPD organization for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. The WRDM organization also has responsibility for certain science-based and other platform-services organizations, which provide end-to-end technical expertise and other services to the various R&D projects, as well as the Worldwide Medical and Safety group, which ensures that Pfizer provides all stakeholders––including patients, healthcare providers, pharmacists, payers and health authorities––with complete and up-to-date information on the risks and benefits associated with Pfizer products so that they can make appropriate decisions on how and when to use Pfizer’s medicines.

•GPD––the costs associated with our GPD organization, which is generally responsible for clinical trials from WRDM in the Biopharma portfolio, including late stage portfolio spend. GPD also provides technical support and other services to Pfizer R&D projects. GPD is responsible for facilitating all regulatory submissions and interactions with regulatory agencies.

•Other––the operating results of our Consumer Healthcare business, through July 31, 2019, and costs associated with other commercial activities not managed as part of Biopharma or Upjohn, including all strategy, business development, portfolio management and valuation capabilities, which previously had been reported in various parts of the organization.

•Corporate and Other Unallocated––the costs associated with corporate enabling functions (such as digital, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance, and worldwide procurement), patient advocacy activities and certain compensation and other corporate costs, such as interest income and expense, and gains and losses on investments, as well as overhead expenses associated with our manufacturing (which include manufacturing variances associated with production) and commercial operations that are not directly assessed to an operating segment, as business unit (segment) management does not manage these costs. Corporate and Other Unallocated also includes our share of earnings from the GSK Consumer Healthcare joint venture and other charges related to the GSK Consumer Healthcare joint venture, primarily representing our pro-rata share of restructuring and business combination accounting charges recorded by the GSK Consumer Healthcare joint venture.

•Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and PP&E; (ii) acquisition-related costs, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company; and (iii) certain significant items, representing substantive and/or unusual, and in some cases recurring, items (such as gains on the completion of joint venture transactions, restructuring charges, legal charges or gains and losses from equity securities) that are evaluated on an individual basis by management and that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items can include, but are not limited to, non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.

Segment Assets

We manage our assets on a Total Company basis, not by operating segment, as many of our operating assets are shared or commingled; therefore, such information is not presented.

Selected Income Statement Information

The following summarizes selected income statement information by reportable segment:
	Three Months Ended
	Revenues				Earnings(a)
(MILLIONS OF DOLLARS)	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019
Reportable Segments:
Biopharma	$	10,215	$	9,952	$	6,807	$	6,506
Upjohn	1,916		2,351		1,009		1,384
Total reportable segments	12,131		12,303		7,816		7,890
Other business activities	—		377		(1,939)		(1,469)
Reconciling Items:
Corporate and other unallocated	—		—		(1,192)		(1,439)
Purchase accounting adjustments	—		—		(823)		(1,141)
Acquisition-related costs	—		—		(11)		(300)
Certain significant items(b)	—		—		(1,675)		7,187
	$	12,131	$	12,680	$	2,176	$	10,727
	Nine Months Ended
	Revenues				Earnings(a)
(MILLIONS OF DOLLARS)	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019
Reportable Segments:
Biopharma	$	30,017	$	28,429	$	20,186	$	18,461
Upjohn	5,944		8,535		3,367		5,635
Total reportable segments	35,961		36,964		23,554		24,096
Other business activities	—		2,098		(4,958)		(3,776)
Reconciling Items:
Corporate and other unallocated	—		—		(3,437)		(4,116)
Purchase accounting adjustments	—		—		(2,545)		(3,357)
Acquisition-related costs	—		—		(46)		(152)
Certain significant items(b)	—		—		(2,554)		6,495
	$	35,961	$	39,062	$	10,014	$	19,190

(a)Income from continuing operations before provision/(benefit) for taxes on income. Biopharma’s earnings include dividend income of $44 million in the third quarter of 2020 and $43 million in the third quarter of 2019, and $196 million in the first nine months of 2020 and $184 million in the first nine months of 2019 from our investment in ViiV. See Note 4.

(b)Certain significant items are substantive and/or unusual, and in some cases recurring, items (as noted above) that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. In the third quarter and first nine months of 2020, includes, among other items, intangible asset impairment charges of $900 million, recorded in Other (income)/deductions—net, related to IPR&D assets acquired in connection with our Array acquisition. In the third quarter and first nine months of 2019, includes, among other items, a pre-tax gain of $8.1 billion recorded in (Gain) on completion of Consumer Healthcare JV transaction associated with the completion of the GSK Consumer Healthcare joint venture transaction (See Note 2). Certain significant items are discussed further in Note 3 and Note 4.

Equity in the net income of investees accounted for by the equity method is not significant for any of our operating segments.

The operating segment information does not purport to represent the revenues, costs and income from continuing operations before provision for taxes on income that each of our operating segments would have recorded had each segment operated as a standalone company during the periods presented.

B. Geographic Information

The following summarizes revenues by geographic area:
	Three Months Ended					Nine Months Ended
(MILLIONS OF DOLLARS)	September 27, 2020		September 29, 2019		% Change	September 27, 2020		September 29, 2019		% Change
United States	$	5,716	$	5,850	(2)	$	16,770	$	18,360	(9)
Developed Europe(a)	2,087		2,135		(2)	6,095		6,450		(5)
Developed Rest of World	1,634		1,585		3	4,642		4,758		(2)
Emerging Markets	2,694		3,110		(13)	8,453		9,493		(11)
Revenues	$	12,131	$	12,680	(4)	$	35,961	$	39,062	(8)

(a)Revenues denominated in euros were $1.7 billion in the third quarter of 2020 and $1.7 billion in the third quarter of 2019, and were $4.9 billion in the first nine months of 2020 and $5.2 billion in the first nine months of 2019.

C. Other Revenue Information

Significant Product Revenues

The following provides detailed revenue information for several of our major products:

(MILLIONS OF DOLLARS)		Three Months Ended				Nine Months Ended
PRODUCT	PRIMARY INDICATION OR CLASS	Sept. 27, 2020		Sept. 29, 2019		Sept. 27, 2020		Sept. 29, 2019
TOTAL REVENUES		$	12,131	$	12,680	$	35,961	$	39,062
PFIZER BIOPHARMACEUTICALS GROUP (BIOPHARMA)		$	10,215	$	9,952	$	30,017	$	28,429
Internal Medicine(a)		$	2,085	$	2,128	$	6,695	$	6,508
Eliquis alliance revenues and direct sales	Nonvalvular atrial fibrillation, deep vein thrombosis, pulmonary embolism	1,114		1,025		3,686		3,121
Chantix/Champix	An aid to smoking cessation treatment in adults 18 years of age or older	223		276		728		825
Premarin family	Symptoms of menopause	168		182		471		542
BMP2	Development of bone and cartilage	70		66		197		212
Toviaz	Overactive bladder	59		61		183		186
All other Internal Medicine	Various	451		517		1,429		1,621
Oncology		$	2,761	$	2,350	$	7,843	$	6,547
Ibrance	Metastatic breast cancer	1,357		1,283		3,955		3,677
Xtandi alliance revenues	mCRPC, nmCRPC, mCSPC	266		225		741		594
Sutent	Advanced and/or metastatic RCC, adjuvant RCC, refractory GIST (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor	202		224		616		704
Inlyta	Advanced RCC	195		139		559		316
Xalkori	ALK-positive and ROS1-positive advanced NSCLC	122		130		409		385
Bosulif	Philadelphia chromosome–positive chronic myelogenous leukemia	111		90		324		267
Retacrit(b)	Anemia	102		64		278		147
Lorbrena	ALK-positive metastatic NSCLC	55		32		142		77
Braftovi	In combination with Mektovi for metastatic melanoma for patients who test positive for a BRAF genetic mutation and, in combination with Erbitux® (cetuximab), for the treatment of BRAFV600E-mutant metastatic colorectal cancer after prior therapy	42		18		116		18
Mektovi	In combination with Braftovi for metastatic melanoma for patients who test positive for a BRAF genetic mutation	34		19		103		19

(MILLIONS OF DOLLARS)		Three Months Ended				Nine Months Ended
PRODUCT	PRIMARY INDICATION OR CLASS	Sept. 27, 2020		Sept. 29, 2019		Sept. 27, 2020		Sept. 29, 2019
Ruxience(b)	Non-hodgkin’s lymphoma, chronic lymphocytic leukemia, granulomatosis with polyangiitis (Wegener’s Granulomatosis) and microscopic polyangiitis	59		—		78		—
All other Oncology	Various	217		125		522		342
Hospital(a), (c)		$	1,728	$	1,840	$	5,535	$	5,505
Sulperazon	Bacterial infections	143		163		432		505
Medrol	Anti-inflammatory glucocorticoid	87		109		295		348
Zithromax	Bacterial infections	25		77		218		254
Precedex	Sedation agent in surgery or intensive care	55		36		211		116
Vfend	Fungal infections	52		87		201		265
Panzyga	Primary humoral immunodeficiency	62		46		199		107
Fragmin	Treatment/prevention of venous thromboembolism	60		62		178		185
Zyvox	Bacterial infections	51		61		176		195
Pfizer CentreOne(d)	Various	242		176		618		556
All other Anti-infectives	Various	384		434		1,195		1,260
All other Hospital(c)	Various	568		589		1,813		1,713
Vaccines		$	1,717	$	1,808	$	4,574	$	4,795
Prevnar 13/Prevenar 13	Pneumococcal disease	1,534		1,603		4,100		4,268
Nimenrix	Meningococcal disease	50		52		180		159
FSME/IMMUN-TicoVac	Tick-borne encephalitis disease	77		64		170		197
All other Vaccines	Various	56		89		124		171
Inflammation & Immunology (I&I)		$	1,173	$	1,226	$	3,299	$	3,482
Xeljanz	RA, PsA, UC, active polyarticular course juvenile idiopathic arthritis	654		599		1,741		1,634
Enbrel (Outside the U.S. and Canada)	RA, juvenile idiopathic arthritis, PsA, plaque psoriasis, pediatric plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis	321		415		1,005		1,285
Inflectra/Remsima(b)	Crohn’s disease, pediatric Crohn’s disease, UC, pediatric UC, RA in combination with methotrexate, ankylosing spondylitis, PsA and plaque psoriasis	162		155		471		446
All other I&I	Various	35		58		83		116
Rare Disease		$	752	$	601	$	2,071	$	1,592
Vyndaqel/Vyndamax	ATTR-cardiomyopathy and polyneuropathy	351		156		859		259
BeneFIX	Hemophilia B	107		125		337		372
Genotropin	Replacement of human growth hormone	107		124		316		357
Refacto AF/Xyntha	Hemophilia A	92		104		272		319
Somavert	Acromegaly	67		64		198		192
All other Rare Disease	Various	27		28		89		94
UPJOHN(a)		$	1,916	$	2,351	$	5,944	$	8,535
Lipitor	Reduction of LDL cholesterol	356		476		1,191		1,506
Lyrica	Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury	352		527		1,058		2,888
Norvasc	Hypertension	183		219		601		735
Celebrex	Arthritis pain and inflammation, acute pain	133		179		428		526
Viagra	Erectile dysfunction	121		120		342		379
Effexor	Depression and certain anxiety disorders	80		80		242		242
Zoloft	Depression and certain anxiety disorders	76		74		233		217
EpiPen(a)	Epinephrine injection used in treatment of life-threatening allergic reactions	58		74		194		197
Xalatan/Xalacom	Glaucoma and ocular hypertension	62		68		188		201
Xanax	Anxiety disorders	55		50		149		147
All other Upjohn	Various	442		485		1,317		1,496
CONSUMER HEALTHCARE BUSINESS(e)		$	—	$	377	$	—	$	2,098
Total Alliance revenues		$	1,250	$	1,141	$	4,036	$	3,418
Total Biosimilars(b)		$	424	$	236	$	1,001	$	632
Total Sterile Injectable Pharmaceuticals(f)		$	1,195	$	1,248	$	3,839	$	3,703

(a)Beginning in 2020, Upjohn began managing our Meridian subsidiary, the manufacturer of EpiPen and other auto-injector products, and a pre-existing strategic collaboration between Pfizer and Mylan for generic drugs in Japan (Mylan-Japan). As a result, revenues associated with our Meridian subsidiary, except for product revenues for EpiPen sold in Canada, and Mylan-Japan, are reported in our Upjohn business beginning in the first quarter of 2020. We have reclassified revenues

associated with our Meridian subsidiary and Mylan-Japan from the Hospital and Internal Medicine categories to the Upjohn business to conform 2019 product revenues to the current presentation.

(b)Biosimilars are highly similar versions of approved and authorized biological medicines and primarily include revenues from Inflectra/Remsima, Retacrit and Ruxience.

(c)Hospital is a business unit that commercializes our global portfolio of sterile injectable and anti-infective medicines. Hospital also includes Pfizer CentreOne(d). All other Hospital primarily includes revenues from legacy Sterile Injectables Pharmaceuticals (SIP) products (that are not anti-infective products) and, to a much lesser extent, solid oral dose products (that are not anti-infective products). SIP anti-infective products that are not individually listed above are recorded in “All other Anti-infectives”.

(d)Pfizer CentreOne includes revenues from our contract manufacturing and active pharmaceutical ingredient sales operation, including sterile injectables contract manufacturing, and revenues related to our manufacturing and supply agreements.

(e)On July 31, 2019, Pfizer’s Consumer Healthcare business, an over-the-counter medicines business, was combined with GSK’s consumer healthcare business to form a new consumer healthcare joint venture. See Note 2B.

(f)Total Sterile Injectable Pharmaceuticals represents the total of all branded and generic injectable products in the Hospital business, including anti-infective sterile injectable pharmaceuticals.